What would an employer in a competitive market do when the cost of labor increases?
A) Reduce cost on capital
B) Change capital-labor mix
C) Hire only unskilled workers
D) Decrease its dependence on technology

Question

Quizplus · Accepted Answer

In a competitive market, an employer would likely choose to change the capital-labor mix when the cost of labor increases. This means that they would utilize more capital in the production process and reduce their reliance on labor. This could mean investing in technology and machinery to perform tasks that were previously done by human workers. By doing this, the employer can maintain their level of output while reducing their labor costs, helping them remain competitive in the market.

What Would an Employer in a Competitive Market Do When